Mercedes Benz India to pump Rs. 300 crore in the next few years

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Even though global automakers like Mercedes-Benz, etc are bearish about the American and other developed markets, their sentiments are understood to be quite bullish towards emerging markets like India. The company has reaffirmed its expansion plans and has said that the economy is expected to bounce-back over the medium-term and the growth prospects are immense from this country. Furthermore, company will go ahead with its product launch plans which include its latest E-class series and a host of other models along with variants of its existing models. Furthermore, the Indian arm of the German luxury car maker will invest about Rs. 150 crore in its new facility at Pune in Maharashtra, while a similar amount has been earmarked for upgrading and increasing its retail network in the country. Until now, Mercedes-Benz India had invested about Rs. 250 crore in the manufacturing plant where its passenger cars, trucks and buses are assembled. It will also be roping in another 80 engineers at its R&D centre in Bangalore, where its current strength is 220. It is to be mentioned that there are 10 engineers working in the R&D centre of the car maker in Pune.

Currently, Mercedes-Benz assembles C and E-Class range which now account for indigenisation level of up to 40-50 per cent. However, the S-Class range, which is also assembled in India, has 25 per cent local content. Furthermore, with its new state-of-the-art plant in Pune already going on stream, the Indian arm of the German luxury carmaker claims that it can add more value to buyers and bring about necessary customisation and address preferences. The company has a capacity to manufacture 5,000 cars a year/shift at the new plant commissioned in February. To beat recession, Mercedes-Benz has introduced several innovative schemes by tying up with banks. The German automaker, which addresses the Rs. 25 lakh-and-above segment, accounted for nearly half of this market with overall sales of 3,625 cars (2,415 in 2007) of the 7,500 cars sold in this segment in 2008.

According to a senior representative of Mercedes-Benz India, Mercedes car can be tailor-made for Indian consumers if the car maker is able to have enough volumes in the domestic market. The representative said the Indian government should do a rethink on charging higher excise duty on luxury cars if they want the manufacturers of these cars to set up a full-fledged plant in the country as it will lead to increase in employment as well as more contracts for auto component manufacturers.

In its bid to cash in on the opportunities emerging in the Indian market. In this regard, the company will be rolling out new models, especially low-floor buses, and three axle buses, in the next 12-15 months. Furthermore, it is also looking at launching different models of trucks, in phases. Currently, high-end trucks from Mercedes stable, used mainly in mining, are available in the country.